Friday, January 31, 2020

Sparrowhawk: ahead the dismissal of the Director General of Taxes

The representatives of the main Cameroonian employers request the dismissal of the Cameroonian tax chief, a sign of a deterioration in relations between the business and public sector sectors due to the underperformance of the economy.

The president of the Inter Patronal Group of Cameroon (GICAM), CĂ©lestin Tawamba, in a letter dated January 16 and addressed to President Paul Biya, complained about the attitude of the current head of the Directorate General of Taxes (DGI ), Modeste Mopa Fatoing.

An observer of the country's economic environment summed up the letter, saying it was "an indictment and, most importantly, an explicit request for dismissal [from Fatoing]". 

In what was obviously a deliberate leak, the letter made the headlines in the business press. A headline dated January 22 said: "Complete breakdown of relations between the Director General of Taxes and businesses" and contained substantial extracts from the letter. Naturally, 

The tax reform of Gicam in question 

According to a copy of the letter, seen by Jeune Afrique, the boss of the bosses openly criticized the boss of the DGI for, among other things, "his inability to dialogue and to face the contradiction, the refusal to issue administrative documents which led to considerable delays in investment, its inability to design a short and medium-term budgetary policy capable of stimulating growth while ensuring an appreciable level of income for the State, its ignorance of the business reality ”. 

For Tawamba, it seems that the straw that broke the camel's back was "Fatoing's hostility to a GICAM tax reform proposal in which he [Fatoing] thought he perceived an attempt by the private sector to replace the State, despite the instructions of his superiors ”.

The cornerstone of GICAM's 300-page tax reform proposal, submitted in 2018, was to reduce the minimum revenue recovery rate from 2.2% to 1.1%. This would give businesses tax relief worth 51 billion CFA francs ($ 8.7 billion). Tawamba, who is also the founder of the Cadyst Invest group, has always advocated the abandonment of activity-based taxation in favor of a profit-based tax. 

Cameroon and the IMF 

DGI Fatoing rejected the complaints. "The DGI is opposed to nothing," he said. 

An official from the tax administration said: "The budgetary and fiscal arbitrations are carried out by the presidency" and pointed out that 71% of GICAM's proposals were validated by a steering committee created in 2018 by the Minister of Finance Louis Paul Motaze, most of which are gradually Running. 

“The remaining 29% of the proposals, which include the question of minimum collection, require in-depth studies of their impact, all while Cameroon is under program with the IMF. In addition, the Minister of Finance had communicated this to employers on November 3, 2018, in Douala, "said our source. 

The recipient of the letter, President Paul Biya, remained silent.